Photo: G. Edward Johnson / Wikimedia Commons, CC BY 4.0, cropped
Highest-Yielding Treasury ETFs (October 2026): 22 Funds Ranked, From SGOV at 3.65% to TLT at 5%
As of October 9, 2026, the highest-yielding plain Treasury ETFs are long-term funds: Vanguard Extended Duration (EDV) at 5.80%, PIMCO 25+ Year Zero Coupon (ZROZ) at 5.71%, Vanguard Long-Term Treasury (VGLT) at 5.05% and iShares 20+ Year (TLT) at 5.01%. They also had the worst one-year total returns, from -7.7% to -15.9%, because bond prices fall when rates rise. T-bill ETFs such as SGOV (3.65%), BIL (3.66%) and USFR (3.72%) pay less but barely move in price and returned about 3.7% to 4.1%. Short-term funds are for safety. Long-term funds pay more and can lose more.
How we ranked them
Every figure was pulled on October 9, 2026.
- Yield is the trailing 12-month yield: what the fund paid over the past year, divided by today's price.
- Fee is the expense ratio.
- 1-year return is total return, including the payouts.
- All 22 funds hold only US government debt. No corporate bonds, no options.
For context, the 10-year Treasury yield touched 5.35% on October 7, its highest since 2002, and was near 5.23% on October 8. The Federal Reserve's rate is 3.75% to 4.00%.
The full ranking by yield
| Rank | ETF | What it holds | Yield | Fee | 1-year return |
|---|---|---|---|---|---|
| 1 | EDV Vanguard Extended Duration | 20 to 30 year zero-coupon | 5.80% | 0.05% | -14.51% |
| 2 | ZROZ PIMCO 25+ Year Zero Coupon | 25+ year zero-coupon | 5.71% | 0.15% | -15.87% |
| 3 | VGLT Vanguard Long-Term Treasury | 10+ years | 5.05% | 0.03% | -7.72% |
| 4 | TLT iShares 20+ Year Treasury | 20+ years | 5.01% | 0.15% | -8.89% |
| 5 | TLH iShares 10-20 Year Treasury | 10 to 20 years | 4.87% | 0.15% | -6.64% |
| 6 | SPTL SPDR Portfolio Long Term Treasury | 10+ years | 4.59% | 0.03% | -7.53% |
| 7 | IEF iShares 7-10 Year Treasury | 7 to 10 years | 4.16% | 0.15% | -3.67% |
| 8 | SCHR Schwab Intermediate-Term Treasury | 3 to 10 years | 4.09% | 0.03% | -1.64% |
| 9 | VGIT Vanguard Intermediate-Term Treasury | 3 to 10 years | 4.04% | 0.03% | -1.67% |
| 10 | SCHO Schwab Short-Term Treasury | 1 to 3 years | 3.85% | 0.03% | +1.75% |
| 11 | IEI iShares 3-7 Year Treasury | 3 to 7 years | 3.84% | 0.15% | -1.29% |
| 12 | GOVT iShares US Treasury Bond | All maturities | 3.81% | 0.05% | -1.82% |
| 13 | VGSH Vanguard Short-Term Treasury | 1 to 3 years | 3.79% | 0.03% | +1.74% |
| 14 | XHLF BondBloxx 6 Month Target Duration | About 6 months | 3.76% | 0.03% | +3.52% |
| 15 | TFLO iShares Treasury Floating Rate | Floating-rate notes | 3.73% | 0.15% | +4.01% |
| 16 | CLIP Global X 1-3 Month T-Bill | 1 to 3 months | 3.73% | 0.07% | +3.75% |
| 17 | USFR WisdomTree Floating Rate Treasury | Floating-rate notes | 3.72% | 0.15% | +4.08% |
| 18 | BIL SPDR 1-3 Month T-Bill | 1 to 3 months | 3.66% | 0.14% | +3.70% |
| 19 | SGOV iShares 0-3 Month Treasury | 0 to 3 months | 3.65% | 0.09% | +3.77% |
| 20 | TBIL US Treasury 3 Month Bill | 3 months | 3.64% | 0.15% | +3.74% |
| 21 | SHV iShares Short Treasury | Up to 1 year | 3.64% | 0.15% | +3.63% |
| 22 | SHY iShares 1-3 Year Treasury | 1 to 3 years | 3.63% | 0.15% | +1.63% |
Source: StockAnalysis fund data, October 9, 2026. Most pay monthly. EDV and ZROZ pay quarterly.
The pattern you can't miss
Read the last column from top to bottom. The higher the yield, the worse the one-year return.
The four funds at the top paid the most and lost the most. The T-bill funds near the bottom paid the least and were the only ones that reliably made money.
That isn't bad luck. It's how bonds work.
Why "safe" Treasuries lost money
A Treasury bond is a promise to pay a fixed amount of interest. When new bonds start paying more, older bonds paying less become less attractive, so their prices fall.
The longer a bond has left to run, the harder it falls. This sensitivity is called duration.
A rough guide for a 1 percentage point rise in interest rates:
| Type of fund | Example | Approximate price drop |
|---|---|---|
| T-bills | SGOV, BIL | Almost none |
| Short-term (1 to 3 years) | VGSH, SHY | About 2% |
| Intermediate (7 to 10 years) | IEF | About 7% |
| Long-term (20+ years) | TLT | About 16% |
| Zero-coupon long | EDV, ZROZ | About 24% or more |
It works the other way too. If rates fall by a point, TLT gains about 16%. Long-term bond funds are a bet on the direction of interest rates as much as a source of income.
Over the past year, long-term rates rose. So long-term funds fell. For the basics, see how bonds work.
T-bill ETFs: the cash alternative
These eight funds hold government debt that matures within months. Their prices barely move.
| ETF | Yield | Fee | Assets | 1-year return |
|---|---|---|---|---|
| XHLF | 3.76% | 0.03% | $2.0B | +3.52% |
| TFLO | 3.73% | 0.15% | $7.1B | +4.01% |
| CLIP | 3.73% | 0.07% | $2.4B | +3.75% |
| USFR | 3.72% | 0.15% | $20.8B | +4.08% |
| BIL | 3.66% | 0.14% | $50.8B | +3.70% |
| SGOV | 3.65% | 0.09% | $113.1B | +3.77% |
| TBIL | 3.64% | 0.15% | $7.5B | +3.74% |
| SHV | 3.64% | 0.15% | $23.6B | +3.63% |
SGOV vs BIL: nearly identical holdings. SGOV charges 0.09% and BIL charges 0.14%, and SGOV returned slightly more. SGOV is also more than twice the size.
USFR and TFLO hold floating-rate Treasury notes, whose interest resets every week. They did best over the past year because short-term rates went up.
A note on these yields: the trailing number looks back 12 months. The Fed raised rates in September, so what these funds pay over the next few months should be a little higher than the trailing figure. If the Fed cuts later, payouts will drop just as fast.
Short and intermediate funds: the middle ground
| ETF | Maturity | Yield | Fee | 1-year return |
|---|---|---|---|---|
| SCHO | 1 to 3 years | 3.85% | 0.03% | +1.75% |
| VGSH | 1 to 3 years | 3.79% | 0.03% | +1.74% |
| SHY | 1 to 3 years | 3.63% | 0.15% | +1.63% |
| SCHR | 3 to 10 years | 4.09% | 0.03% | -1.64% |
| VGIT | 3 to 10 years | 4.04% | 0.03% | -1.67% |
| IEF | 7 to 10 years | 4.16% | 0.15% | -3.67% |
Fees matter here. SCHO and VGSH hold the same kind of bonds as SHY and charge a fifth of the price. That shows up directly in the yield and the return.
Long-term funds: highest yield, biggest swings
| ETF | Yield | Fee | Assets | 1-year return |
|---|---|---|---|---|
| EDV | 5.80% | 0.05% | $3.5B | -14.51% |
| ZROZ | 5.71% | 0.15% | $1.9B | -15.87% |
| VGLT | 5.05% | 0.03% | $10.4B | -7.72% |
| TLT | 5.01% | 0.15% | $47.7B | -8.89% |
| SPTL | 4.59% | 0.03% | $10.9B | -7.53% |
VGLT vs TLT: similar exposure, and VGLT costs 0.03% against TLT's 0.15%. TLT is far more heavily traded, which matters to active traders and options users. For buy-and-hold investors, the cheaper fund wins.
EDV and ZROZ hold zero-coupon Treasuries, which pay nothing until they mature. They're the most rate-sensitive funds you can buy without leverage.
What $10,000 pays in a year
Based on trailing yield, before tax. Payouts change.
| ETF | Yield | Income per year | Income per month |
|---|---|---|---|
| EDV | 5.80% | $580 | $48 |
| TLT | 5.01% | $501 | $42 |
| IEF | 4.16% | $416 | $35 |
| VGSH | 3.79% | $379 | $32 |
| SGOV | 3.65% | $365 | $30 |
The gap between SGOV and TLT is $136 a year on $10,000. Over the past year, TLT holders gave up about $1,400 in price to earn it.
The tax advantage
Interest from US Treasuries is:
- Taxable on your federal return, as ordinary income
- Exempt from state and local income tax
Treasury ETFs pass that exemption through. If you live in a high-tax state such as California or New York, a Treasury ETF at 3.65% can beat a savings account paying 4% after tax.
Your fund company publishes the share of income that qualifies each year. You or your tax software enter it on your state return.
ETF or the real thing?
You can also buy Treasuries directly. See how to buy Treasury bills.
| Treasury ETF | Individual Treasury | |
|---|---|---|
| Fee | 0.03% to 0.15% | None |
| Maturity date | Never matures | Fixed date, full value returned |
| Effort | Buy once | Reinvest as each one matures |
| Selling early | Easy | Possible, sometimes at a worse price |
The key difference: a bond you hold to maturity pays you back in full, whatever rates did in between. A bond fund never matures, so there's no date when you're guaranteed your money back. If you need a set amount on a set date, buy the bond or build a ladder.
Which fund for which job
This is how the numbers sort, not a recommendation.
- Parking cash you may need soon: SGOV, BIL or XHLF.
- Lowest fee on T-bills: XHLF (0.03%).
- Largest and most traded T-bill fund: SGOV.
- A bit more yield with modest risk: SCHO or VGSH.
- A core bond holding for a balanced portfolio: VGIT, SCHR or GOVT.
- Locking in about 5% for the long term: VGLT or TLT, accepting large swings.
- Betting that rates will fall: EDV or ZROZ, the most sensitive.
The bottom line
Treasury ETFs are paying more than they have in over two decades. The yield you see is only half the story. Long-term funds pay about 5% and can drop 10% or more in a year. T-bill funds pay about 3.7% and stay put. Match the fund to when you need the money: short-term money in short-term funds, and long-term funds only with money you can leave alone through the swings.
Frequently asked questions
Which Treasury ETF has the highest yield?
As of October 9, 2026, the Vanguard Extended Duration Treasury ETF (EDV) had the highest trailing yield among the 22 funds we reviewed, at 5.80%, followed by PIMCO's ZROZ at 5.71%, Vanguard's VGLT at 5.05% and iShares' TLT at 5.01%. All four hold long-term Treasuries and lost between 7.7% and 15.9% in total return over the past year.
What is the best T-bill ETF?
The largest is the iShares 0-3 Month Treasury Bond ETF (SGOV), with $113 billion in assets, a 0.09% fee and a 3.65% trailing yield. BIL, SHV, TBIL, CLIP and XHLF are similar. XHLF has the lowest fee at 0.03%. Floating-rate funds USFR and TFLO yielded slightly more at about 3.7%.
Can you lose money in a Treasury ETF?
Yes. The US government is very unlikely to default, but bond prices fall when interest rates rise. TLT lost 8.89% over the year to October 9, 2026, even after paying its 5% yield. T-bill ETFs have almost no price risk because their holdings mature within months.
Is SGOV better than a savings account?
It can be. SGOV yielded 3.65% with a 0.09% fee, its interest is exempt from state and local income tax, and you can sell it any trading day. A savings account is FDIC insured and has no price movement at all. Compare the after-tax yield, especially if you live in a high-tax state.
Are Treasury ETF dividends taxable?
Interest from US Treasuries is taxed as ordinary income at the federal level but is exempt from state and local income tax. Treasury ETFs pass that exemption through for the portion of income that comes from Treasuries. Your fund company publishes the percentage each year.
Should I buy TLT now that yields are over 5%?
TLT locks in a yield near 5% for a long time, and it would gain sharply if rates fall. If rates keep rising, it will lose more. It suits investors who want long-term income or expect rates to drop and can accept large swings. It is not a substitute for cash.
Primary sources
- StockAnalysis — ETF dividend yield, expense ratio, assets and total return data (retrieved October 9, 2026)
- StockAnalysis — iShares 20+ Year Treasury Bond ETF (TLT) data
- Federal Reserve — H.15 Selected Interest Rates (daily)
- TreasuryDirect — Treasury bills, notes and bonds
- IRS — Topic no. 403, Interest received
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 9, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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